Does the Price of Gasoline Modify Travel Behavior?

By Dom Nozzi

Studies show that American demand for high-priced gasoline is extremely inelastic (that is, Americans are willing [compelled?] to buy gasoline at their current promiscuous rate regardless of how high the price goes).

Why inelastic?

Because it is currently so incredibly rational to drive a car, even high-priced gas has only a relatively minor impact on changing travel behavior. After all, driving gives you extreme comfort, freedom from criminals, status, speed, convenience, heavy government subsidies, etc. By contrast, taking the bus, walking or bicycling requires one to recklessly and irrationally avoid all these wonderful benefits and instead, risk your life. As for “putting up with extra time,” studies show that Americans hate congestion almost as much as they hate density (which is a related problem in their minds). That is why we have a NIMBY epidemic, and why Americans hardly blink when their federal elected officials spend hundreds of billions of tax dollars each year to make cars happy (less burdened, in the very short term, by congestion, that is). It is also why, at the local level, Americans show “road rage” to the point of shooting people who make a left turn too slowly, and only elect commissioners who promise to spend all our local tax dollars to widen all the roads. I’ll never be mayor…

For all these reasons, I recommend “planned congestion” as a very effective aversive technique for car travel. “Planned congestion” is a tool with which a community makes a conscious decision NOT to widen roads/intersections or synch traffic signals, or engage in other conventional methods to “reduce” congestion.

Significant restrictions and higher prices for parking are also relatively effective ways to influence travel behavior. In Gainesville, Florida, very high parking costs and parking inconvenience on the University of Florida campus led to a nation-leading increase in bus ridership by UF students in the late 1990s.

As Donald Shoup points out, higher priced parking overwhelms higher priced gas in terms of impact on your pocketbook. After all, even with a gas guzzler car and gas that costs, say, $4 per gallon, howred-gas-pump-2 much would it cost to drive across town? But look at how quickly the price of that trip goes through the roof if we jack up the price of parking from, say, $1 to $10 per time parked across town (which is quite fair, given the public and private costs to provide parking).

This is not to mention the highly effective nature of “congestion fees,” in which you charge motorists fees based on when they are driving on major roads that tend to become congested, and even better, to charge fees that vary throughout the day (higher fees charged when the road is more congested).

For the record, I am not recommending that Americans “give up their cars.” I just want the cars to behave themselves — by driving more slowly and attentively in towns, and by having their drivers pay their fair share.

Fairly priced parking, parking scarcity, and congestion fees are very durable (in terms of modifying behavior), if designed correctly. They effectively send a very loud signal each day: If you choose the socially irresponsible, unsustainable travel behavior, you will pay through the nose. If not, you are free from such payments and can instead use your hard-earned money to spend a romantic weekend in Paris…  The message is especially clear if you see your fellow citizens zipping along in the tolled or high-occupancy vehicle lane next to your bumper-to-bumper congested “free” lane, or if you see your co-worker chuckling over his/her higher paycheck because he is not needing to pay for his workplace parking space with his paycheck, since he/she gets to work by bus, and has “cashed out” their “free” job site parking space.

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Filed under Town and Transportation Planning

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